April 01, 2020
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UMaine System estimates short-term loss from pandemic at $20 million

Linda Coan O'Kresik | BDN
Linda Coan O'Kresik | BDN
University of Maine System Chancellor Dannel Malloy

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Maine’s public university system is estimating a $20 million short-term loss — or 3.6 percent of its budget for the 2019-20 academic year — after all seven universities transitioned to remote learning and asked most students to leave campus to halt the spread of the coronavirus.

The estimate offers one of the first glimpses of the financial loss a large government entity will experience as a result of the coronavirus pandemic that has forced businesses to shut down and governments to scale back services.

[Our COVID-19 tracker contains the most recent information on Maine cases by county]

University of Maine System Chancellor Dannel Malloy revealed the estimate in a letter to Maine’s congressional delegation urging Congress to keep the public universities’ fiscal losses in mind while considering a federal stimulus package for organizations and businesses hurt by the COVID-19 pandemic.

“We estimate our short-term revenue losses to be in excess of $20 million and the long-term ramifications are much greater but impossible to quantify at this time,” Malloy wrote.

“Unfortunately, the steps we are taking to minimize the impact of these necessary measures on our students — 42 percent of whom are the first in their families to attend college — is [sic] having a devastating financial impact on our public universities and threatening their ability to operate into the future,” the chancellor wrote.

Maine state government is also bracing for a major hit to revenues as a result of the response to the COVID-19 pandemic, but officials haven’t yet quantified short-term losses.

All seven of Maine’s public universities transitioned to remote learning on Wednesday, students’ first day back from an extended spring break, after announcing the decision to close dorms on March 11. Only 5 percent of students are continuing to live in residence halls for the remainder of the spring semester.

[Read our full coronavirus coverage here]

The university system is issuing refunds for 46 percent of room and board fees to the more than 5,500 students who moved out of their dorms.

That means the university system will return — and lose — $12.85 million in room and board revenue. The biggest loss will be at the University of Maine, with the flagship campus returning $7.3 million in housing and dining service fees to students.

The university system plans to process those refunds by March 31.

“We made the determination that students had been planning on the university to provide food and shelter through the end of the semester,” University of Maine System spokesperson Dan Demeritt said. “Our students still have those essential needs, and refunds should be processed as soon as possible to help students who are now at no fault of their own looking elsewhere for housing and meals.”

The remainder of the $20 million short-term loss comes from $1.5 million in added technology and software costs to pay for online instruction as well as $3 million less in revenue the university system expects from the state’s casinos, which have been forced to close, according to Malloy’s letter.

Lost revenue from bookstore operations, printing services, conferences and events, travel study refunds, day care services and summer camps also contributes to the $20 million.

The university system will continue paying its 4,696 regular employees and 2,399 non-federal work-study students wages until April 4.

The 2,171 federal work study student employees across the system will be paid throughout the semester.

“Campus operations and revenue changed dramatically over the last two weeks but the discussion of layoffs is premature,” Malloy said in a statement. “We are using this time to assess the potential impact of federal disaster aid and state appropriation decisions on university budgets. With a new agreement in place to assist the Maine Emergency Management Agency, we will also be considering opportunities to transition employees to work that supports Maine’s public health emergency response.”

 


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